Green In The U.S.A.

During the past five years, just about every politician has touted the promise of cleantech to create new American jobs. During the Great Recession, President Obama allocated billions of dollars and much political capital to incentivize and promote everything from home energy efficiency to solar energy.

Yet, the U.S. seems to be losing out on the green jobs race. For example, The New York Times recently reported that Silicon Valley solar companies are struggling to keep pace with surging solar panel output from China. The Chinese now supply 40% of solar panels in California, the largest market in the country.

There are many reasons for China's new solar dominance -- cheap labor, cheap government credit, and falling silicon prices. The Chinese pressure has resulted in a fall-off of solar investment dollars -- venture capital for solar companies fell to $144 million this quarter vs. $451 million a year ago.

If green goes offshore in the way of electronics and seemingly every other manufactured good sold in the U.S., it is hard to envision a new green economy saving American jobs.

However, it could be that for the first time in decades, the American consumer may save the American worker. American solar companies and others should capitalize on "Made in the U.S.A." to help set them apart from foreign competitors on the basis of sustainability.

While economics will always be a key driver for buyers, we have seen the emergence of the "awareness consumer" over the past decade, as has been noted in past columns in this publication. Last year's Annual Ipsos Green Technology Report showed that nearly a third of technology consumers would be willing to pay more for a greener product.

Why does this matter? As we all know, product sourcing is a major component in sustainability. Solar panels made in the U.S. are "greener" than panels made in China because they don't have to travel as far.

There is additional evidence to suggest that American consumers are starting to get it. A new survey by the Shelton Group, an advertising firm specializing in sustainability, reports that "Made in the U.S.A." and sustainability are beginning to be linked in the minds of consumers. This is also reflected in the rise of urban farming and green markets -- consumers increasingly understand that buying locally is more sustainable than buying organic produce that is shipped in from Chile.

Another example comes from the home improvement industry. From LEED to government incentives, up-greening the home has been a major focus of industry and government. The Shelton report asked homeowners what were the top three criteria in deciding if a home improvement product was green -- the top answer was energy efficiency, but 20% said "Made in the U.S.A." was important as well, and 9% cited American-made as the top criteria.

The social component of sustainability also ties in to "Made in the U.S.A." -- in addition to a locally sourced product, the slogan means the social benefits of good manufacturing jobs stay local as well.

This Made in the U.S.A. / sustainability message opens up a new marketing opportunity for American cleantech companies. As green evolves from a market differentiator to a market requirement, American companies should tout the "Made in the U.S.A." label, not to appeal to a buyer's patriotism, as past campaigns have attempted, but to appeal to consumers' increasing interest in maximum sustainability.

While American companies will always have to compete on price, if American cleantech drove home this "locally grown" message, it may just help mitigate the many economic advantages of China.

4 comments about "Green In The U.S.A. ".
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  1. Elena Turner from Dallas Area Rapid Transit, October 20, 2010 at 11:12 a.m.

    Another issue might be details such as solar water heaters not being qualified for energy efficiency tax credits for some insane reason.

  2. Chris Corbett from KMA Direct Communications, October 20, 2010 at 11:48 a.m.

    I dunno. When you have the government needing to drum up business, and when all that drumming doesn't produce enough business, it may be because the need is not a great as the experts think.

    Thus, the talk (and in too many cases, the reality) of the government literally forcing businesses and consumers to go green.

    People never like it when you try to force something on them they don't want.

  3. Jason Prater from Me Inc., October 20, 2010 at 12:22 p.m.

    "Made in USA" as a key purchase consideration point for solar? Give me a break.

    Electronics (LG/Samsung) and Automotive (Hyundai/Kia) are just a couple examples where "Made in USA" is a non-factor. Especially since in both categories, American jobs are being created.

    In any economy, including the truly global economic marketplace of today, the majority of consumers will always flock to the price/value quotient of any big-ticket purchase
    with place of manufacturer being a minor factor, at best, if at all. Does anyone really care if their new LCD TV contains TFT film from Taiwan and considers this in their purchase?

    You can't promote a free-market system and then turn back to protectionist attitudes such as "Made in America" when you lose a competitive edge(s).

    Instead of flawed research, let the sales results of the companies within the respective category reflect the real consumer purchase decision factors.

  4. Elizabeth Ward from Thought Partners, October 20, 2010 at 12:43 p.m.

    I'm with Jason on this. If you talk to consumers about their solar panel purchases, there's tremendous price sensitivity. It's only the government and utility incentives that bring them within the realm of short to medium term payback and therefore tip the scales between buying or not buying. For those who install solar panels to be green (and by the way, many people go solar solely for financial reasons), they've already done their part for the planet by investing in panels. They're not going to pay a premium for the additional "sustainability points" of "made in the USA".

    The US needs to either come up with significantly better-performing technology, or find another spot on the value chain.

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